The Answer Might Be Earlier Than You Think
For many people, pensions are easy to ignore.
Retirement feels years away, life is busy and there always seems to be something more immediate competing for your money.
As a result, pensions often become something you’ll “look at next year.”
The reality is that the earlier you start engaging with your pension, the more choices you’re likely to have in the future.
You don’t need to contribute huge amounts from day one, but giving your pension time to grow can make a significant difference over the long term.
Three People. Three Different Outcomes.
Imagine three people who each decide to contribute €300 per month into their pension.
The only difference between them is when they start.
Sarah begins in her twenties.
John starts in his thirties.
Emma waits until her forties.
They all contribute consistently and retire at the same age, but the amount of time their pension has to grow creates very different outcomes.
Why So Many People Delay Their Pension
It’s perfectly understandable why pensions often fall down the priority list.
You may be:
- Saving for a house.
- Paying a mortgage.
- Raising a family.
- Building a career or business.
- Unsure how pensions actually work.
The problem is that every year you delay is another year your pension misses the opportunity to benefit from long-term investment growth.
Why Starting Earlier Matters
When it comes to pensions, time can be just as important as the amount you contribute.
Starting earlier can mean:
- Smaller regular contributions have longer to grow.
- Investment returns have more time to compound.
- Greater flexibility as retirement approaches.
- You may not need to contribute as much later in life to achieve the same outcome.
The earlier you begin, the more opportunity your money has to work for you.
A Simple Example
Let’s assume three people each contribute €300 per month into a pension, achieve an average annual investment return of 5%, and all retire at age 65.
| Investor | Starts Investing | Years Contributing | Total Contributions | Approximate Pension Value at 65* |
|---|---|---|---|---|
| Sarah | 25 | 40 years | €144,000 | €459,000 |
| John | 35 | 30 years | €108,000 | €250,000 |
| Emma | 45 | 20 years | €72,000 | €123,000 |
Although Sarah contributes only €36,000 more than John during her lifetime, her pension is worth more than €200,000 extra at retirement because her investments benefited from an additional ten years of compound growth.
The message isn’t that you’ve left it too late if you’re starting later.
It’s that the sooner you begin, the more time your pension has to work for you.
Figures are illustrative only and assume monthly contributions with 5% annual growth before charges. Actual investment returns are not guaranteed.
What If You’re Starting Later?
Starting later doesn’t mean you’ve missed your opportunity.
It simply means you may need to take a more focused approach by:
- Reviewing how much you’re contributing.
- Making the most of available tax relief.
- Ensuring your pension is invested appropriately.
- Creating a clear retirement plan.
Many people only begin taking their pension seriously in their forties or fifties and still build meaningful retirement savings.
Taking Your Pension Seriously Doesn’t Have to Be Complicated
Looking after your pension isn’t about making dramatic changes every year.
It’s about understanding:
- How much you’ve already built up.
- Whether you’re contributing enough.
- How your pension is invested.
- Whether it’s still aligned with your retirement plans.
Regular reviews can help keep your pension on track without making retirement planning feel overwhelming.
How Oaktree Financial Services Can Help
Every retirement journey is different.
That’s why every pension strategy should be tailored to the individual.
At Oaktree Financial Services, we help clients understand where they stand today and what they need to do to achieve the retirement they want.
We can help you:
- Review your existing pensions.
- Assess whether you’re contributing enough.
- Explain your investment options.
- Maximise available tax relief where appropriate.
- Build a retirement strategy that’s tailored to your goals.
Whether you’re just starting your pension journey or reviewing years of accumulated savings, our aim is to help you make informed decisions with confidence.
Adrian Godwin is a Senior Financial Consultant and the co-founder and managing director of Oaktree Financial Services. With a background in accounting and tax advising, Adrian specialises in estate planning and wealth management.Adrian offers clients reassurance through best practice solutions. His unique skill set and qualifications enable clients to develop comprehensive life plans that align with their goals.
